You have a great idea. It’s a million dollar idea. A sure thing.
Stop yourself right there.
What you have is an assumption based on your opinion.
Before you, me, or any entrepreneur takes the leap of faith and invests in the development of our big idea, we need to perform a little (actually a lot) of investigating.
We have a hypothesis: the market will value this idea and pay a price that will allow for a sustainable business model.
The next step should be to gather relevant evidence that either supports or refutes that hypothesis. Yes, this can be scary, but wouldn’t you rather know that your idea is a dud before you invest time and money?
Truth be told, Zanifesto is in this phase right now. We invested a tiny little bit to develop just enough of a product to gather feedback. We love our baby, but are prepared to have it ripped to shreds. Then we’ll put it back together in a way that is even better.
Let’s break this down:
You need to talk to your target market. You and your family are not the target market. You, your parents, and your spouse are biased. Obscenely biased. They think your idea is amazing and will surely be a great success. (Ours do!) But they aren’t the ones who will ultimately buy your idea.
Instead, use their cheers as motivation to keep you going through the tough times as you bootstrap your idea into a business.
You need to get outside of your comfort zone and talk to the people who would actually buy and use your idea. Set up meetings with strangers. Visit them in their offices. Have a casual conversation or give a presentation explaining your idea.
Gather so much evidence that a clear trend begins to emerge.
…Will Value Your Idea…
You’ve identified your target market. Now you need to know what they think about it. Does your idea solve a problem? Does it solve the problem well? Does it solve the problem better than your competitors? Is that problem pervasive? Is that problem urgent?
Yes, you are gathering individual opinions, but they are relevant opinions and in large numbers. They are coming from the people who will buy and use your idea, and the large number of opinions begin to uncover trends and shed light on consensus, which you can consider a fact.
…And Pay a Price That Will Allow for a Sustainable Business Model.
Your target market likes your idea. It solves a problem and would be a useful solution. But how much are they willing to pay for it?
Sometimes, the answer is nothing. Sometimes it is not enough.
Keep this number in mind as you develop your business plan and refine your business model. In order to maintain a successful business, you have to make more than you spend. Is the price tag determined by the market enough to keep your business thriving?
The results may be a let down, but the earlier you know, the sooner you can pivot, iterate, or start anew.